Proton transfer reactions in proteins are fundamentally important in bioenergetics and biochemical catalysis. During FY01, we have made progress in three areas. (1) Role of hydrophobic channels. Many of the proton translocating proteins have crystallographically empty nonpolar channels, including cytochrome c oxidase, bacteriorhodopsin, and cytochrome P450. We could show that small changes in the local polarity can induce filling of such channels by water, thus establishing protonic connectivities only when needed, and minimizing the risk of proton leakage (Hummer et al., Nature, 8-Nov-2001). (2) Role of protein dynamics. We developed a general method to probe the correlated motion of protein sidechains and water, and identified proton transfer pathways in cytochrome P40cam (Taraphder and Hummer, JACS, submitted). (3) Role of water in binding between cytochrome c and cytochrome c oxidase. In collaboration with the group of Ferguson-Miller (Michigan State), we identified an extensively hydrated interface in the model complex of cytochrome c and cytochrome c oxidase. This provides an explanation for the measured effects of mutations on electron transfer and the kinetics of protein complex formation.